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What to do about the "patent troll" problem | Opensource.com

A new report titled An Overview of the "Patent Trolls" Debate [PDF] is a balanced but ultimately devastating indictment of "patent trolls." It was prepared by the Congressional Research Service for members of Congress, who could actually do something about the "troll" problem. It's a useful primer for those new to the area.

First, apologies to any who are offended by use of the word "trolls." As the report points out, the problem is that the term is not only pejorative, but also somewhat vague. It notes the common use of the more polite term "non-practicing entities" (NPEs), but favors using instead "patent-assertion entities" (PAEs). These are entities that speculate by buying patents with a view to asserting them against parties that usually have independently invented, produced, and marketed the technology at issue. I'm fine with "PAE," which really is clearer, and also points toward an irresistible pun: all a PAE does is make you pay.

The report recognizes the case that "PAEs impede innovation, undermine the patent system, and wreak havoc on businesses that play a vital role in the American economy." It also notes that PAEs contend they provide benefits by compensating small inventors and managing the risks of investments in research and invention. These benefits may exist, according to the report, but they "are significantly outweighed by the costs."

The Congressional Research Service report does a good job of quickly explaining the dynamics of ordinary PAE cases. "[P]atent litigation is expensive, and there is no quick or affordable way to get rid of a patent suit except to settle. Defendants frequently find settlement the most cost-effective option, even if they are certain that they are not infringing." In addition, "[u]nlike most patentee-plaintiffs, PAEs pursuing infringement suits ‘do not risk disruption to their core business' because ‘patent enforcement is their core business."

One fresh point of the report is research that indicates "that PAE activity could harm competition to the extent that operating companies use or ‘sponsor' PAEs as a means of imposing costs on rivals and achieving other anticompetitive ends." That is, real companies are promoting PAE attacks on rivals. In my view, the PAE model is basically coin-operated (think "show me the money!") and indifferent to any other social objective. The fundamental amorality of that model is disturbing, but the nascent expansion and corporatization of that model is even more so.

The report lists without endorsing various possible legislative options for addressing the PAE problem. Currently pending is the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act, which would provide for the possibility of requiring that a losing plaintiff pay defendant's legal costs in cases involving computer hardware or software patents. This could discourage some PAE suits, although it could be criticized both for leaving some PAE lawsuits untouched and discouraging some non-PAE suits.

Among other potential reforms noted in the report is strengthening enforcement of the definiteness and disclosure requirements of Section 112 of the Patent Act. This could result in invalidation of abstract or ambiguous patents. Congress could also decrease the period for IT patents to less than the current 20-year period.

Another interesting idea is a rule that failure to practice a patent for a number of years could be treated as evidence of abandonment. In such cases, the plaintiff would be required to show efforts to undertake commercial activity in order to proceed. Because most PAE cases are based on older patents, this could stop many such cases.

As the report points out, the law could be changed to eliminate the presumption of validity applicable to existing patents. Under current law, this presumption is rebuttable only by clear and convincing evidence, rather than the more common preponderance of the evidence standard. This standard makes it difficult to invalidate the patents of patent aggressors.

Another possibility is changing the method for calculating damages in a patent case. Software products may involve hundreds of potentially patentable components. A reform could address the risk under that a finding of infringement relating to only one minor component could result in disproportionate damages.

What about a change in the law to eliminate patents for software? The report touches on this possibility, noting that the proposed SHIELD Act would treat software as a special category of invention. It also notes that the old argument that such an approach might be barred by international treaty (the TRIPS agreement) is not decisive. Although many consider this approach too radical to be viable, it's good to see that the Congressional Research Service is not prepared to rule it out.

These and other reform ideas are worth much more discussion. Given the impending election, it's unlikely we'll see any legislative activity addressing the PAE problem in the near future. But the report furnishes data that will be useful in future debates. In the meantime, we've got some presidential debates coming up. Maybe somebody can ask the candidates what they plan to do about the problems of software patents and PAEs.

27 Comments

Software patents are bad, however there are still many legitimate hardware patents that are used in the correct way and without patents then inventors have no legal action if a company decides to just up and steal their idea.

As part of the employment, employees must give their patent to their employer or they don't get hired. Independent inventors are ignored by companies. If they want to make money from their inventions, they must have their own company to market it.

Name one. Small inventors do not benefit from patents since they can't afford to enforce them. When small inventors benefit from their inventions, it's because they did it through marketing and sales, not patent protection. Patents do not benefit small inventors.

Of course there's marketing and sales. A patent sitting in a drawer like an award is unlikely to do you much good by itself. A patent is just a tool, and like other tools sometimes used properly and sometimes not. . Lots of stuff gets patented both by company's and inventors that shouldn't be, because of "common knowledge" that you should patent things. As a result there is a lot of junk, and the patent office approves the patent for it anyway.

I'll leave those I know out of it, with 1 degree of separation of less to the local inventors I'll keep the relationships. It's really not hard to find examples via Google. I suspect though you've decided the answer and are pretty immutable.

There is wide spread agreement that the existing software patent system is a mess. Rob Tiller describes several of the proposals to rationalize the software patent system into a workable framework.

Lawyers fight for their clients best interests with the existing framework of laws and court procedure. The tenacity of hard fighting lawyers drives them to turn every possible pathway through the legal system into an advantage for their client which is why the current software patent legal system is an expensive quagmire. If you rationalize the software patent system to some extent with even more rules and perhaps removing a few of the more odious rules then the lawyers will treat this a reset. They will then begin the game anew from the fresh starting point. The software patent mess will be different after reform but it will still be an expensive, irrational drag on the software industry. No matter how the software patent system is reformed it will still be a less than zero sum game with everybody a loser. As time goes on lawyers will make it more expensive. A well done reform will simply temporarily lessen everybody's losses.

The optimal solution for the software patent mess is the one where nobody loses anything. Abolish software patents.

The only reform that makes sense is abolish software patents! If a law is incredible wrong, why "a balanced reform" between the good (abolish) and the very evil (current situation)? Is non sense!
Software is protected by copyright, that's all what it needs. If you want to "reform" something, then reform copyright, since it lasting 70 years after the death of the author is something ridiculous.

I don't think the copyright sector is as bad off as software patents. The reason being muscians don't get money because copyright is broken but because they sign their rights away for publishing, same with games for the most part however kickstarter is hopefully fixing that. Software patents are a different beast as the companies actually making the patents are abusing them.

That's right, they can't get a contract without signing away all rights. Then the record label does some shyster accounting to prove their not making and money, so the musicians don't get paid. And this attitude is entering the publishing industry. Writers must sign away all rights or their book doesn't get published.

This is an obvious untruth/misstatement of facts.
When Michael Jackson outbid Paul Mcartney for the Beatles catalog Paul was outraged and very soon after Beatles songs heard in commercials, cirque de soliel, ect.
Your statement of "not a single musician has gotten_any_money from a record company..." deals with only the performance rights of a particular performance not performance rights granted to other performers, nor publishing rights of the copyrighted song. Radio stations are performance, sheet music is publishing. itunes, pandora ect are again performance but the negotiated fees didn't really involve the artists/musicians and payments/royalties are lower than radio rates in most cases.the owner of the beatles catalogue didn't like the rates so you didn't see the beatles on itunes for a really long time, or until the ownership transfered at least due to death.

1. Abolish software patents. Software is not by the original definition of patents a patentable entity. Nothing should ever be covered by both copyright and patent.

2. The recent addition of a prior art registry should help fix a lot of the bogus patents. Anyone can freely register 3 prior art examples per patent, no matter the status of the patent.

3. Set guidelines for legal interuptation for trademark, copyright, and patents. Apple should not be able to use design patents to slow competition. Design patents were allowed to prevent companies from trying to rip each other off. So a company that makes fake Rolexes and sells them as Rolexes would be in violation. Samsung's tablet which they clearly market as their own device, would not infringe the iPad.

The US is not a first to file country. We believe in first to invent. Prior art is always relevent as long as it is legitimate.

As for lawyers, they don't make the decisions. Judge's do. And judges very often have to follow case law and legal precedent in these matters. Many cases get over turned by prior art in software patents. This is often due to the fact that software was written without it being copyrighted and the fact that many never applied for patents on the software they did right.

@steve, that's not what "first to file" is about at all.
Its' purpose is the probability of a evolutionary invention being created simultaneously by multiple entities. Whomever applies for [FILES] a patent First is percieved as the first creator and therefore granted patent rights---IF they met all other requirements. Such as "working model" not just conceptual idea. e.g. I could file a patent for a garbage powered flying car and no matter how good my designs are if i don't submit proof of a prototype or working model--i shouldn't be granted a patent for the device.

Lowering the evidence standard required to challenge a patent or eliminating the presumption of patent validity altogether would provide a very meaningful check on the power of the patent office and that of patentees. This isn't just with law. Ars Technica published a very interesting article that demonstrates how the Federal Circuit Court of Appeals went rogue on patents. See here: http://arstechnica.com/tech-policy/2012/09/how-a-rogue-appeals-court-wre...

The best hope we have is the elimination of all patents so that we stop splitting hairs and get to work.

It seemed a very plausible and well laid out argument for a good solution to software patent issues. It also included a number of potential downsides and how to avoid.

Here's the paper abstract:

Commentators have observed for years that patents do less good and cause more harm in the software industry than in other industries such as pharmaceuticals. They have pointed to a variety of problems and offered a variety of solutions.

While there is some truth to each of these criticisms, the real problem with software patents lies elsewhere. Software patent lawyers are increasingly writing patent claims in broad functional terms. Put another way, patentees claim to own not a particular machine, or even a particular series of steps for achieving a goal, but the goal itself. The resulting overbroad patents overlap and create patent thickets.

Patent law has faced this problem before. The Supreme Court ultimately rejected such broad functional claiming in the 1940s as inconsistent with the purposes of the patent statute. When Congress rewrote the Patent Act in 1952, it adopted a compromise position: patentees could write their claim language in functional terms, but when they did so the patent would not cover the goal itself, but only the particular means of implementing that goal described by the patentee and equivalents thereof. These “means-plus-function” claims permitted the patentee to use functional language to describe an element of their invention, but did not permit her to own the function itself however implemented.

Most software patents today are written in functional terms. If courts would faithfully apply the 1952 Act, limiting those claims to the actual algorithms the patentees disclosed and their equivalents, they could prevent overclaiming by software patentees and solve much of the patent thicket problem that besets software innovation.

I read that and found it to be of interest, but they sort of lost me. All software is math, therefore, a law of nature, and is therefore unpatentable. With regard to software patents, we need a good showing on this point. Functional claims ignore this very important fact, indeed, they seek to divert our attention from it.

I would like to see a software patent defense that fully flushes out the "software is math" argument to the Supreme Court. Hopefully the SCOTUS will see the folly of the software patent mess and put a cap on it.

All software is algorithms. This is proven by Alan Turing and John von Neumann. It's too bad the US judges don't believe in facts. :(

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Rob Tiller is vice president and assistant general counsel for Red Hat, where he manages patent, trademark, and copyright matters. He is a frequent speaker and writer on open source legal issues. Before coming to Red Hat, he was a partner with the law firm of Helms, Mulliss & Wicker, PLLC, where he specialized in commercial and IP litigation. He is a graduate of the University of Virginia School of Law, and a former clerk for Justice Antonin Scalia of the U.S. Supreme Court, and Judge

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